A&P requests $5 million for execs, key management
A&P requests $5 million for execs, key management
Days after sending WARN layoff notices to more than 22,000 employees, The Great Atlantic & Pacific Tea Co. filed paperwork in hopes of using $5 million to retain 495 executives and key management employees — less than 2 percent of the overall workforce. Nearly $1 million of the funds would be divided between just 11 employees. The request was filed with the U.S. Bankruptcy Court, Southern District of New York.
Averaging losses of $4.5 million a month, A&P said its "wind down and ultimate closure is not a secret, and the longterm employment uncertainty has understandably caused much concern and consternation among [its] employees." Since it filed bankruptcy in mid-July, 54 "valuable employees" have been lost due to voluntary resignations.
The company went on to say "employees are resigning at an escalating rate," including its chief operating officer, the vice president of human resources and labor relations, the director of deli and bakery, and numerous store managers and district managers.
Of the $5 million, the average payment for corporate-level employees would be $25,000, with field-level employees averaging $7,000. Eleven employees would receive more than $50,000, including two unnamed individuals who would get $125,000 each. The retention payments range from 4 percent to 63 percent of each employee's annual base salary.
Currently, A&P and unions are at odds over the reduction and possible elimination of severance payments and job payments, and Christopher W. McGarry, A&P's chief restructuring officer, said it was not feasible to include union employees in the retention plan. He noted that they are "incentivized to remain with [A&P] and perform well to increase their chances of continued employment" if another company purchases the store.
Initially upon filing for bankruptcy protection the company said it would only sell about 120 stores and close an additional 25; however, since that time A&P has started to look for bidders for its remaining 153 stores. In its request, A&P said the loss of key employees was a distraction that could undermine the sale of its assets and its ability to maximize value and preserve jobs to the detriment of all stakeholders.
